BackRBI okays interim Kotak chief for 2 months
RBI has approved the appointment of Dipak Gupta as interim managing director and chief executive officer of Kotak Mahindra Bank for a period of two months instead of four
PremiumMumbai: The Reserve Bank of India (RBI) has approved the appointment of Dipak Gupta as interim managing director and chief executive officer of Kotak Mahindra Bank for a period of two months instead of four, indicating its intent to appoint a full-time chief during this period.
The appointment of Gupta was necessitated by the sudden resignation of founder Uday Kotak effective 1 September.
The RBI, through its letter dated 7 September 2023, approved Gupta’s appointment for a period of two months with effect from 2 September, Kotak Mahindra Bank said in a stock exchange filing.
Kotak’s resignation came four months ahead of the end of his tenure on 31 December. As an interim arrangement, Gupta, the bank’s joint managing director, was nominated to carry out the duties of the MD and CEO till 31 December.
Following his resignation, Kotak, whose shareholding in the bank stands at 26%, has been inducted into the board as a non-executive independent director.
As the regulations allow large shareholders a maximum term of 15 years as CEO or wholetime director, the bank’s board has decided to induct Kotak as a non-executive director for five years.
While the regulations are silent on promoter CEOs continuing as non-executive directors, concerns remain over whether Kotak could wield influence over the board.
Kotak Mahindra Bank is currently awaiting RBI approval on the proposed CEO succession. The bank had engaged an executive search firm for finding the successor. KVS Manian and Shanti Ekambaram are among the internal candidates in the running.
In his resignation letter, Kotak had mentioned that his exit has been timed in such a manner that it does not overlap with the stepping down of the chairman and Gupta by the end of December.
“It was a voluntary decision taken by me to step down. If you go back, we were all in transition. Transition meant three people stepping down at the same time. This is just sequencing out," he told Mint on 3 September.
Kotak said his fiduciary responsibilities for transition and sequencing are done and he didn’t want to continue till the last day.
“I spent 38 years. A few months here or there doesn’t matter. There is this whole overhang in the market over the transition. So, I have taken the first step towards that. There is an interim CEO, subject to regulatory approval," he said in the interview.
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